In the wake of the NSA scandal and privacy scrutiny from the EU, Google thinks it has a novel solution -- AdID. Google has reportedly been distributing a closed door proposal to advertisers, which would do away with cookie based advertising, which is based on small residual text files stored in local directories on your machine which are often backed up to the cloud. Cookies uniquely identify the user -- but they often give away too much, showing logs of urls which reveal things you've bought, where you are, and more.

Google spokesman Rob Shilkin comments mysteriously:

Technological enhancements can improve users' security while ensuring the Web remains economically viable. We and others have a number of concepts in this area, but they're all at very early stages.

So far few partners and privacy advocates have received the pending proposal, but The USA Today's sources say that will change in a matter of weeks.

Google is contemplating an anonymous replacement for third party cookies.

Google's example will be closely watched, as it's not only the world's biggest internet advertiser, it's also the maker of the most used browser, Chrome. Chrome has past the Mozilla Foundation's Firefox -- long in second place -- and Microsoft Corp.'s (MSFT) Internet Explorer -- previously the most used browser.

Google also controls Android, a mobile smartphone platform that today accounts for four out of every five smartphones sold. Android is one of the biggest targets of mobile advertising.

If Google bans cookies in Chrome and Android, it would shake the market.

Some are cookies are the internet's ugly children. [Image Source: Magdex USA]

Not all are fans of the idea even if it might help with privacy. Comments Zach Coelius, CEO of ad technology firm Triggit to The USA Today, "Restricting third-party cookies isn't going to make relevant advertising go away; it just hands more power to big companies."

Mike Zaneis, general counsel for The Interactive Advertising Bureau (IAB), an advocacy that represents internet advertisers, says that relying on propriety "anonymous" solutions and banning third party cookies is a dangerous power grab. He comments, "They could deprecate the use of that ID on a whim, basically, and severely undermine billions of dollars in digital ad spending."

II. Blocking on the Rise -- But Can it Really Stop Powerful Interests?

The IAB and third party advertisers are very nervous as Mozilla recently made the controversial decision to block many third-party cookies in Firefox. Mozilla has yet to fully implement that decision and has appeared to punt more than once, as it develops a block list for which cookies to allow. It's unclear whether the delays are simply from technical limitations, or if the criticisms of the IAB and other groups are weakening Mozilla's resolve.

Apple, Inc. (AAPL) and Microsoft were actually the first to roll out features allowing users easy routes to ban cookies. Microsoft in Dec. 2010 offered the "Do Not Track" (DNT) feature in Internet Explorer 9, then in Aug. 12 made DNT default to on, with the release of Windows 8's IE version, IE 10. Apple meanwhile, has long offered cookie management options in its menus and as of Safari 5.1 offered an easy button option ("never") to always opt out of third party cookies.

Even the most robust forms of cookie blocking can't fully stop the Obama administration from illegally spying on you. [Image Source: AP]

The real question is whether or not AdIDs will really safeguard your identity from Big Brother -- powerful nation states like the U.S. that increasingly feel the need to "watch" all communications on the internet. Unless Google publishes the standard in an open specification it's impossible to know how robust it is.